Shilling hits 3-year low, to weaken to Sh96.5 mark

The shilling weakened yesterday, with banks covering short dollar positions. The traders said they expected the local unit to ease even further.

Banks quoted the shilling at Sh95.80/90 to the dollar, a new low last seen in November 2011, compared with Friday’s close of Sh95.40/50. “Banks are covering short positions that they accumulated over the weekend. It’s trading with caution,” Chris Muiga, a senior trader at National Bank of Kenya said, noting that banks were buying dollars in anticipation that the shilling could weaken further. “The shilling’s outlook still remains bleak, with the likelihood of the dollar or shilling pair breaching the key Sh96 mark during the week,” Commercial Bank of Africa said in its daily market report.